Government Grants for Small Business

If you've been watching those late night infomercials, you may be convinced that the US government is giving away "Free Money" to just about anybody who needs some. It all looks too easy, just fill out a form or two and wait for the check to arrive.

Starting a small business from scratch is difficult at the best of times and raising startup capital is perhaps the hardest part. Your bank will probably want personal guarantees if they even consider you for a loan. Your savings and even your home may be at risk if your business fails, so the thought of a free government grant to start your business is very tempting. But do these grants really exist and can the average entrepreneur get one?

There are indeed many grant and loan programs for small businesses, including many that are administered by state or local government, rather than the federal government. Unfortunately, the whole procedure for finding and applying for a grant can be time-consuming and complex. Some grant eligibility decisions can take a while to wade through the slow bureaucratic processes. You will have to submit business plans and grant proposals that will take a considerable amount of time to create. Time which could be better spent on building your business.

Having pointed to the drawbacks, there are many genuine government grants for both small businesses and individuals available, and these can be substantial. The government gives away $400 billion, yes billion, in grants. Twenty-six Federal agencies annually offer over 1,000 grant programs in various categories. It will generally be a lot easier to find government help for businesses in deprived or rural areas, or for minority businesses. Typically, consultancy or training packages are more freely available than cold hard cash.

So is it worth applying for a government grant?

The answer has to be a qualified "yes". The money is there, and has to be given away by law, but it isn't "free money" and you will need to read the grant rules carefully and be prepared to spend some time on your application.

Do you need money for your small business startup or charitable project?

A grant, either from the federal or state government or a private foundation may be the answer. The federal government alone has $400 billion to give away. Unfortunately, you can't just call them and ask for a check in the mail - each grant application will need a written and well thought out proposal. Check out the resource page at the end of this article for links and advice on where to apply and procedures to follow.

Follow these guidelines in writing your grant proposal for a good chance of success:

1. Put your self in the reviewers shoes. What is he looking for in your proposal? What information does he need? What format does he prefer?

2. Follow the instructions. It may seem obvious but many, many grant proposals are rejected because basic instructions were not followed. Read and follow any directions.

3. Looks for funding that matches your mission or circumstances. Don't try to change your needs to match the grant. Find the grant that matches your needs.

4. Do some research on the funder. This is particularly important for private foundations. What is the purpose of their grant and what do they want to achieve?

5. Always include a summary or abstract even if not specifically asked for. This covers the project and its aims in two or three paragraphs. It can be part of the proposal or in a cover letter. Include key points to explain the objectives of the project.

6. Review and edit for spelling and grammar. Have somebody else review. Then a third person. Nothing will put off a reviewer faster than sloppy grammar or bad spelling.

7. Be innovation. Be creative. Stand out from the crowd.

8. Learn from the rejections. Ask for feedback from the reviewer if you can. Learn from your mistakes and improve your methodology.

9. Don't give up. Even the best baseball batting average is close to 0.3. This means that they miss 70% of the time. You will fail as much as this, if not more. Keep trying.